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The Arizona Community College Coordinating Council today released a groundbreaking statewide economic impact study revealing far-reaching annual economic value produced by Arizona’s 21 publicly-funded community colleges within ten college districts throughout the state.
The report, Demonstrating the Value of Arizona’s Community Colleges, summarizes economic impact and return on investment of Arizona’s Community Colleges in fiscal year 2013-2014. The statewide analysis was conducted by Economic Modeling Specialists International (EMSi).
EMSi used a two-pronged approach for Arizona’s study. First, EMSi conducted an economic impact analysis to prove the impact of Arizona’s community colleges on the business community. Second, EMSi analyzed the return on community college investment for students, taxpayers, and Arizona’s society at large.
Findings from the Arizona report are profound.
Arizona’s community colleges created $14.5 billion in economic impact to the state in fiscal year 2013-2014 – approximately 5.6 percent of Arizona’s Gross State Product – on the level of other major economic sectors according to state data. Gross State Product is a measurement of a state’s output; it is the sum of value added from all industries in the state. GSP is the state counterpart to the national gross domestic product (GDP).
“We knew Arizona’s community colleges had a major impact on our economy,” said Jack Lunsford, Arizona Community College Coordinating Council chief executive office, “but we were astounded to learn that our annual economic impact is on par with our state’s top industry sectors such as aerospace and defense at $15 billion and manufacturing at approximately 23 billion.”
The annual $14.5 billion economic impact produced by Arizona’s community colleges includes $13 billion in alumni value, payroll and operational expenses of $1.2 billion annually, and new annual revenue from out-of-state students at $300 million. Arizona’s community colleges currently employ more than 10,000 faculty and staff, ranking collectively as one of Arizona’s largest employers.
Arizona’s community colleges currently graduate more than 40,000 students per year with associate’s degrees and a variety of certificates. More than 90 percent of students who attend Arizona’s community colleges remain in Arizona and contribute to our state’s prosperity and quality of life.
According to the study, students who complete an associate’s degree from Arizona’s community colleges enjoy nearly a $10,000 increase in annual earnings compared to those who have received only a high school diploma. Over a lifetime, this amounts to an undiscounted value of nearly $400,000 in higher income per community college graduate.
“For every one dollar students invest in their community college degree, students will receive a cumulative return in higher future wages of $4.90 – nearly a $1-to-$5 cumulative return on investment,” Lunsford said. “That’s 19%, better than the stock market.”
Students who attended Arizona’s community colleges during the study year are expected to contribute to taxpayer savings a safer, healthier state, producing more tax revenue and reducing taxpayer costs associated with health, crime and unemployment. “The ROI for taxpayers’ investment is 3.6:1,” Lunsford explained, “and it’s 11:1 for society.”
The Arizona report follows EMSi’s 2012 national community college economic impact study, Where Value Meets Values: The Economic Impact of Community Colleges.
In the national study, EMSi reported that America’s community colleges and attending students added $809 billion in income to the U.S. economy, equaling 5.4 percent of the nation’s Gross Domestic Product.
EMSi has conducted more than 1,200 higher education economic impact studies in four countries since 2000. For executive summaries and full reports of both Arizona and national community college economic impact reports, visit www. azcommunitycolleges.org.
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